- The Federal Government has revealed plans to use the net proceeds of its ongoing N150 billion Sukuk issuance to fund some 53 road projects nationwide.
This was made known by the Director General, Debt Management Office Ms. Patience Oniha during an investors’ forum in Abuja on Thursday.
According to her, the 53 roads cover over 3,000km adding that the tolls collected from the roads will be used to repay the Sukuk.
Sukuk is a non-interest, asset-backed bond that is based on the principles of Islamic finance.
Oniha reiterated federal government’s committment to value-driven borrowing through project-focused Sukuk, which has contributed to visible road and bridge projects.
Recognizing infrastructure’s pivotal role in economic growth, she stated, “infrastructure is an enabler of economic development.”
Furthermore, she expressed optimism that the N150 billion Sukuk would be oversubscribed, noting that the extra funds that may be realised will be used for available projects.
She said, “The government and people involved believe in the use of Sukuk and plan to continue offering it every year. The hope is that ethical investors will invest in the Sukuk.”
She invited ethical investors to take advantage of the opportunities present in sukuk to participate in subscribing to the offer. Similarly, she encouraged widespread participation, highlighting that Sukuk VI’s proceeds would fund projects across the country’s six geopolitical zones.
The DMO boss noted that banks are interested in sukuk because of “its tax-exempt status and the liquidity it affords them”.